COMPENSATION UNDER EMPLOYEE’S COMPENSATION ACT,

1923

Ishaan Savla; TY A039.

EMPLOYEE’S COMPENSATION ACT, 1923

The aim and objective of this Act is to provide payment of COMPENSATION to employees from employers for injury by accident.

Under § 2 (1) (c) of the Employee’s Compensation Act: "compensation" means compensation as provided for by this Act.

WHEN IS COMPENSATION TO BE GIVEN?

The Employer is liable to pay COMPENSATION in two cases:

Employer’s Liability

Accident

Arising out of and in the course of employment

Occupational Disease

Exposed to certain diseases inherent in the Occupation

FACTORS CONSIDERED

The factors considered while calculating the COMPENSATION to be provided to the Employee for his injury are:

1. Nature of injury2. Monthly wages of the employee3. Relevant factor Other conditions to be fulfilled:1. Engaged with the employer2. Occurred at the place of employment3. Risk incidental or inherent in the nature of

employment

HOW MUCH COMPENSATION IS TO BE GIVEN?

The provisions pertaining to the quantum of COMPENSATION are listed in § 4 of the Act.

The different contingencies contemplated by the Section are:Death Permanent

disablement

Total Partial

Temporary disablement

Total Partial

DEATH The formula to determine the

COMPENSATION in case of Death as listed out in § 4 of the Act is:

50% of the monthly wages x the relevant factor

ORAn amount of Rs. 1,20,000/-

Whichever is more. In cases of death the Employer is also

liable to pay Rs. 2,500/- as funeral expenses.

EXAMPLE Death; MW: Rs. 3,000/-; Age: 34

Relevant factor for age 34= 199.40

C= 50 x 3000 x 199.40100

Compensation is Rs. 2,99,100/-

PERMANENT TOTAL DISABLEMENT

The formula to determine the COMPENSATION in case of Permanent Total Disablement as listed out in § 4 of the Act is:

60% of the monthly wages x the relevant factor

ORAn amount of Rs. 1,40,000/-

Whichever is more.

EXAMPLE TPD; MW: Rs. 3,000/-; Age: 34

Relevant factor for age 34= 199.40

C= 60 x 3000 x 199.40100

Compensation is Rs. 3,58,920/-

PERMANENT PARTIAL DISABLEMENT

The COMPENSATION in case of Permanent Partial Disablement as listed out in § 4 of the Act is:

1. If the injury is listed in Part II of Schedule I: such percentage which would have been payable in case of PTD as being percentage of loss of earning capacity.

2. If not listed in Schedule I: such percentage payable in case of PTD as is proportionate to the loss of earning capacity.

EXAMPLE PPD; MW: Rs. 2,000/-; Age: 30

Relevant Factor age 30= 207.98

C= 60% of 60 x 2000 x 207.98100

= 60% of 2,49,576Compensation is Rs.1,49,746/-

TEMPORARY DISABLEMENT The COMPENSATION in case of

Temporary Disablement as listed out in § 4 of the Act is:

25% of the monthly wages This compensation is payable every half-

month.

RELEVANT FACTOR The relevant factor is a mathematical figure,

calculated with reference to the age of the employee which is contained in Schedule IV.

B.E.S.T. v/s. MRS. AGNES “Though the doctrine of reasonable or notional

extension of employment developed in the context of specific workshops, factories or harbours, equally applies to such a bus service the doctrine necessarily will have to be adapted to meet its peculiar requirements. While in a case of a factory, the premises of the employer which gives ingress or egress to the factory is a limited one, in the case of a city transport service, by analogy, the entire fleet of buses forming the service would be the "Premises".

In the present case, therefore, the High Court was right in saying that the accident occurred to Nanu Raman during the course of his employment and, therefore, the respondent was entitled to compensation.”